Renewable Energy Technology Assessments - Kauai Island Utility ...
Renewable Energy Technology Assessments - Kauai Island Utility ...
Renewable Energy Technology Assessments - Kauai Island Utility ...
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Kaua’i <strong>Island</strong> <strong>Utility</strong> Cooperative<br />
<strong>Renewable</strong> <strong>Energy</strong> <strong>Technology</strong> <strong>Assessments</strong> 6.0 <strong>Renewable</strong> <strong>Energy</strong> Financial Incentives<br />
6.0 <strong>Renewable</strong> <strong>Energy</strong> Financial Incentives<br />
A number of financial incentives are available for the installation of renewable<br />
energy and conversion technologies. These incentives can be of great significance<br />
because they often make the difference between a non-viable and a viable project, and<br />
can substantially influence profitability. Careful thought should be put into determining<br />
which incentives apply to each new project, and how to best take advantage of such<br />
incentives. The following discussion provides a list of existing and proposed programs<br />
that are available to new energy facilities.<br />
It should be noted that the intent of this section is to provide general information<br />
on available incentives. Black & Veatch cannot provide tax advice concerning the<br />
implications of the specific incentive programs. Furthermore, although many of these<br />
incentives are designed as tax credits, it may still be possible for non-taxable entities,<br />
such as KIUC, to claim them by establishing facility ownership through a third-party<br />
taxable entity or other project structures.<br />
This section describes the federal incentives available to renewable energy<br />
projects and other non-government programs designed to capture the value of renewable<br />
energy.<br />
6.1 Federal Financial Incentives<br />
The federal government began providing significant incentives for alternative<br />
energy during the oil embargo in the 1970s. The government has spent over $14 billion<br />
on research and development activities, in addition to tax and financial incentives for<br />
project development and energy production. The federal incentives reviewed for this<br />
project include the following<br />
• Section 45 Tax Credit (Production Tax Credit)<br />
• Reduced Depreciation Life<br />
• <strong>Renewable</strong> <strong>Energy</strong> Production Incentive (REPI)<br />
• Investment Tax Credit<br />
• Farm Security and Rural Investment Act of 2002 Incentives<br />
• Rural Economic Development Loan and Grant Program<br />
• RUS Electric Loan Program<br />
• High <strong>Energy</strong> Cost Grant Program<br />
• Tribal <strong>Energy</strong> Program<br />
• Miscellaneous Loan Guarantee and Grant Programs<br />
• Federal Green Power Purchasing Goal<br />
21 March 2005 6-1 Black & Veatch
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